Which of the following statements is true?
A) The full employment rate of unemployment has been at about 4 percent since the 1960s.
B) The economy is at full employment when only the cyclically unemployed are out of work.
C) The natural rate of unemployment is typically lower then the full employment rate of unemployment.
D) The natural rate of unemployment is the rate that includes only the frictionally and structurally unemployed.

Question

Quizplus · Accepted Answer

The natural rate of unemployment includes those who are frictionally unemployed (between jobs or entering the workforce) and structurally unemployed (skills do not match job requirements), but not those who are cyclically unemployed due to economic downturns.

Which of the Following Statements Is True